New data shows that crypto scam and hack losses in the first half of 2023 were down a whopping 75% from the same period last year. A recently released report by Beosin, a blockchain security firm, revealed that the total value of cryptocurrencies lost in scams, hacks, and rug pulls targeting Web3 platforms reached $656.61 million during the first half of 2023. For comparison, $1.9 billion was lost to Web3 scams in the same quarter last year.
DeFi Platforms Remain The Most Frequent Target
Decentralized finance (DeFi) platforms were hit the hardest by scams and hacks in the first half of 2023. Decentralized finance aims to disrupt traditional financial institutions, but with its anonymity and lack of regulation also come more opportunities for fraud. The total loss from 85 DeFi security breaches reached $292 million, accounting for 62% of the total losses.
Criminals are known for always exploiting vulnerabilities in unaudited smart contracts to drain funds, but the number of cases has reduced dramatically. As a result, hackers taking advantage of smart contract vulnerabilities resulted in a loss of $264 million, accounting for 56% of the total losses.
On the other hand, phishing scams and rug pulls were more frequent. Around $108 million was lost due to victims falling victim to phishing scams, while approximately $75.87 million was lost due to victims falling victim to rug pull scams.
However, the reduction in total money lost in the first half this year is great news for crypto investors and the industry in general. Less money stolen means more money in the pockets of honest traders and holders.
Ethereum Remains The Biggest Blockchain Target
Due to the considerable number of Web3 projects on Ethereum, the blockchain has been a major target for scams and hacks in the crypto space. Unfortunately, that trend continued into the first half of 2023. While the total value stolen from Ethereum scams and hacks fell compared to 2022, it still represented the majority of funds stolen in the crypto sector.
In total, 75.6% of the loss amount came from Ethereum, coming up to approximately $356 million. With 58 cases, the BNB Chain had the highest number of recorded attacks, which accounted for 53.7% of all security incidents.
Total market cap holding above $1.6 trillion | Source: Crypto Total Market Cap on TradingView.comImproved Security Measures
Beosin’s report paints a picture of the current perspective of the cryptocurrency industry. It shows that Web3 projects have really stepped up their security game, and the crypto community has gotten smarter about security best practices.
Professional smart contract auditing has increased, although approximately 49% of the attacked projects had not undergone an audit.
Some of the biggest attacks were the $197 million breach on Euler Finance, the $67 million stolen from Atomic Wallet, and the MEV sandwich attacks resulting in a total loss of approximately $25 million.
About $113 million was sent to Tornado Cash and other mixers, while $215 million was recovered from attackers.
USDT/CNY rebounded and broke through 7.05 on Monday. China's central bank cut interest rates again, ending the USDT depreciation cycle and easing the panic of the Federal Reserve starting easing.
MiyukiThe parent company of the US crypto-friendly bank Silvergate filed for bankruptcy on September 19. The bank’s executives revealed that the key reason for the collapse was the Federal Reserve’s sudden shift in regulatory policy.
WeiliangNervos Network (CKB) has seen a price increase of over 13% recently, driven by strong community support and trading volume, while its price has surged nearly 50% in the past month. Meanwhile, a new competitor, Mpeppe (MPEPE), is gaining attention in the cryptocurrency space, offering an AI-powered casino experience and attracting significant investor interest, with over $3 million raised in its presale.
WeatherlyA brand's value is defined by its virality and cultural relevance, as seen with meme coins. Discussions at TOKEN2049 highlighted that these digital assets depend on community engagement and cultural momentum, making brand identity essential for success.
CatherineHamster Kombat banned over 2.3 million players for cheating, sparking outrage among the community, especially those who had invested months into the game. Despite introducing an “Interlude Season” to offer extra rewards, tensions remain high, and the game’s token has seen a sharp drop in value.
WeatherlyThe official @OpenAINewsroom account on X was hacked on September 23, promoting a fake cryptocurrency called $OPENAI. The scam led users to a counterfeit website that prompted them to connect their wallets, risking financial loss.
AnaisSam Altman, CEO of OpenAI, believes superintelligence could emerge in just a few years, significantly advancing technology and human capabilities. He remains confident that AI will bring prosperity and creativity, despite concerns about job displacement.
AnaisAfter the Federal Reserve decided to cut interest rates by 50 basis points in September, Bitcoin once surged to $64,000. According to US media, during the price increase, details of the meeting between Musk and Salvadoran President Bukele were exposed, and they talked about the future of mankind.
AlexBitcoin fell back from its high of $64,741 at the beginning of the week to around $63,000. Market analysis pointed out that BlackRock's new withdrawal policy has triggered panic among traders.
MiyukiExperts at TOKEN2049 agreed that Singapore’s progressive initiatives, such as the digital token payment guide, support industry growth. As a leading financial and fintech hub, Singapore prioritises incentives for companies, reinforcing its reputation for stability as a Web3 leader.
Catherine